A due diligence checklist can provide attorneys with a framework to collect, understand and assessing the information that is gathered through simple or complicated legal processes. If it is used for M&A and vendor onboarding or customer due diligence activities to support anti-money laundering (AML) and know-your-customer (KYC) compliance, a due diligence checklist can boost efficiency, offer better customer service and ensure that important data is not overlooked.
A due diligence checklist that is efficient will focus on the most crucial aspects of the transaction and the documents that pertain to each one. This allows the person who is reviewing of the due diligence checklists to pinpoint any legal issues that may arise from the purchase or merger and determine if the purchase is worth the effort.
Due diligence should include an examination of intellectual property, contracts and compliance with the law. Also, it should include a review of the financial stability and capabilities of the vendor. This includes looking over credit reports and statements as well as assessing their business’s capabilities and capacity. A due diligence checklist for companies must also consider how employees are treated including reviewing pay and benefits and accrued vacation time, and determining whether the company complies with environmental standards.
Due diligence should also include screening third parties against the databases of law enforcement agencies such as Interpol or the FBI or the National Crime Agency of the UK and any countries that are associated with them to look for signs of terrorist activity or corruption. This is particularly important in dealing with high-net worth individuals, also referred to as PEPs. Interviews with key stakeholders and vendors are also crucial to conduct an extensive due-diligence. This will help you learn about the culture of the business and the problems it faces.
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